Last year, X Company sold 68,400 units of its only product for $19.00 each. Total costs...

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Last year, X Company sold 68,400 units of its only product for $19.00 each. Total costs were as follows: Cost of goods sold V

business accounting

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Answer 1

Answer #1

Variable cost of goods sold per unit = $387,828 / 68,400 units

= $5.67

Relevant cost per unit = Variable cost per unit

Special order profit = ($11 - $5.67) * 4,090

= $21,800

Relevant cost per unit = Variable cost per unit + Additional costs

Special order profit = [($11 - $5.67 - $0.9 - $0.27) * 4,090] - $1,000

= $16,014

Reduction in profit = $21,800 - $16,014

= $5,786

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Answer 2

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